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For the first time in company history, Bear Stearns (BSC) suffered a loss, and a much bigger loss than expected.

As with many financial institutions, they got clobbered by their entry into subprime mortgages. Bear Stearns is the fifth-largest investment bank in the U.S.

In response, the company suspended bonuses for its top executives. Some think that's a mistake, as it could lead to a number of them quitting, which could slow them down from making a solid rebound.

For the fourth quarter ending November 30, the company said it took a $1.9 billion write-down, in direct correlation with the reduction in value of securities connected to subprime mortgages. Expectations and guidance were that write-downs would total close to $1.2 billion.

Most analysts were expecting the company to suffer a loss of $1.80 a share, but the net loss of $854 million, or $6.90 a share was four times larger than projections. Last year the company enjoyed a profit of $563 million during the same quarter.

While it seems that the subprime mortgage issues are largely over for the company, there have been other concerns about its equity revenue, which has decreased by 11 percent to $384 million; a weaker position than its major rivals.

Chief Financial Officer Sam Molinaro responded to those concerns saying its brokerage business was still "strong and vibrant" and customers weren't abandoning their relationship with the company. He said some of the decline was from customers cutting back on their leverage in uncertain credit markets.

It does make you wonder what the rest of the decline has come from though.

The long-term credit rating of Bear Stearns was cut by Moody's Investors Service to "A2," which represents the sixth highest level.

Audio of Bear Stearns Conference call.